PCS responds to government procurement reforms
PCS welcomes the potential to bring more work back in-house
The government has announced that it is introducing a new “public interest test”, with government departments being asked to assess whether outsourced service contracts over £1 million could be delivered more effectively in-house.
The test will cover over 95% of central government contracts by value and the government says it will deliver a fairer deal for taxpayers and end outsourcing by default.
PCS has long campaigned for essential public services to be insourced, arguing that it not only delivers better outcomes for workers and taxpayers but also ensures accountability, security, and continuity in public service delivery.
However, PCS warns that stronger commitments are needed to ensure insourcing becomes the default. Recent outsourcing failures, such as the Capita pensions crisis, underline why change is clearly needed. Despite failing to pay pensions to thousands of retired civil servants, Capita has been handed another contract worth hundreds of millions of pounds under the government’s “Synergy” shared services programme.
The government’s plans to introduce a public interest test for contracts over £1 million could create new opportunities for public sector workers and improve the delivery of services, provided it is implemented meaningfully and not treated as a box-ticking exercise.
PCS has concerns about whether departments will be given the resources and capacity needed to bring work back in-house, and whether workers currently employed in outsourced roles will be properly protected. There must be an investment in the workforce delivering public services, including fair pay, job security, and meaningful consultation with trade unions.
PCS general secretary Fran Heathcote said: “This could be a turning point if it leads to real change, but warm words won’t be enough. For too long, outsourcing has hollowed out public services, undermining pay, job security and working conditions, and too often delivering failure, disruption and poor value for money.
“The Capita pensions crisis exposes the real consequences of outsourcing essential services, leaving thousands of people paying the price when private contractors fail. It should serve as a stark warning of what can go wrong when critical functions are outsourced, not ignored while even bigger contracts are handed out.
“If the government is serious about its pledge to deliver the biggest wave of insourcing in a generation, then this step needs to be taken, and it must be backed by proper investment and protection for workers. It’s now time to act.
“Our members deliver high-quality public services, but they deserve the resources, pay and security to continue to do so. This must mark a genuine shift, not a continuation of the same approach."